Trade association DEG estimates U.S. spending on Blu-ray purchases and rentals rose 23% in Q1, which allowed total sales of physical media to fall just 0.6% Y/Y in spite of slumping DVD demand. This, along with growing spending on digital downloads and streaming, allowed an industry that has been slumping for several years to deliver a 2.5% sales increase. (previous)

The buzz in Hollywood isn't so much who will get the open Disney (DIS) studio chief job, as it's who would want the job? The company's plotted strategy of developing brands around its films means that key decision-making comes from unit heads - instead of the ceremonial studio chief. But just ask Rich Ross what happens when a film goes awry like John Carter.

Providence Equity Partners is selling its 10% stake in Hulu to co-owners Disney (DIS), Comcast (CMCSA), and News Corp. (NWS, NWSA) at a $2B valuation, Bloomberg reports. The valuation is just slightly above $1.9B offer Dish Network reportedly made for Hulu before last year's sales process was cancelled. Hulu's revenue rose 60% last year, but is still only a fraction of Netflix's (NFLX).

New Disney (DIS+1.1%) flick The Avengers opened to international audiences at a record-setting pace, according to early box office reports. Though the film doesn't hit stateside until May 4, pre-sales in the U.S. are also exceptionally brisk. The movie is the first offering from Marvel Comics to be marketed and distributed by Disney, with hopes running high it will make up for the John Carter debacle.

Netflix's (NFLX-1.1%) streaming service cut into ratings for kids shows from Disney (DIS+1.1%) and Viacom (VIA-0.1%) in Q1, according to analysis from Sanford Bernstein. The two companies now face a bit of a conundrum - do they pull their premium kids programming off of Netflix and make the service less compelling or ring in the extra ~$75M in annual revenue the NFLX arrangement delivers?

The SEC is investigating at least 5 movie studios, including Disney (DIS), Fox (NWSA), and DreamWorks (DWA), according to sources - over their dealings with Chinese officials as they try to expand into that country's market. Add this one to the Wal-Mart, Hewlett-Packard, and Avon investigations.

Disney (DIS-0.5%) plans to start selling Starbucks (SBUX-1.9%) coffee at its array of theme parks in Florida and California. The company plan to integrate the Starbucks stores into the motif of individual properties. Financial terms of the arrangement were not disclosed, including if parents can expect to pay the Disney premium for a cup of Joe.

Interviews for a new studio chief will begin in earnest shortly at Disney (DIS-1.0%) as the company looks to replace Rich Ross who rode a flop with John Carter out the exit door. While finding an exec with film experience is still a priority, one producer laments that the Disney job is now a desk job that is less about being creative and more about the bottom line.

Having just announced it would begin selling ads for original content, Hulu says it will add 4 new original shows: We Got Next, The Awesomes, Don't Quit Your Daydream, and Flow. Web video rivals Netflix (NFLX), Amazon (AMZN), and Yahoo (YHOO) are also stepping up their investments in original programming, to the slight consternation of studios and traditional TV networks.

Walt Disney (DIS+1.7%) movie chief Rich Ross steps down with no immediate successor named - a move that comes after John Carter became one of the studio's notable flops, but ahead of what should be a summer success from its Marvel unit in The Avengers.

Goldman Sachs sees a strong FQ2 for Buy-rated Disney (DIS-0.5%), led by advertising and theme park revenue drivers. The firm slots in EPS for the period at $0.58 - above the consensus mark of the Street.

It's a ritual that's usually for established cable channels and network broadcasters, but on Thursday Hulu will pitch original progamming to advertisers. The online video company is also expected to announce that its $8-a-month Hulu Plus service has topped 2M subscribers for the first time.

As U.S. box office receipts and DVD sales remain under pressure, Hollywood can take heart in China's potential. In February, China said it would increase the number of foreign films allowed in a year to 34 from 20, and would allow studios to keep 25% of receipts (up from a prior 13.5-17.5%). This comes after a year in which Chinese receipts grew 35% to $2B. Nonetheless, studios remain concerned the Chinese government is ultimately focused on promoting its own film industry.

Stung by its $200B boondoggleJohn Carter, Disney (DIS) is mounting a superhero-style marketing campaign to ensure The Avengers is a blockbuster. Expectations are high, as analysts say the Marvel Comics-inspired movie may generate U.S. ticket sales of $155M in its opening weekend, which would surpass last month's huge start by The Hunger Games.

Major media companies take a dive after Citigroup slashes its ratings on CBS (CBS-2.2%), Discovery (DISCA-1.7%), Disney (DIS-2.2%) and News Corp. (NWSA-2.2%) to Neutral from Buy. Time Warner (TWX-1.6%) also tumbles even after the firm hikes its price target on the company to $45 from $40.

Walt Disney Co, together with its subsidiaries, is a diversified entertainment company with operations in five business segments: Media Networks, Parks and Resorts, Studio Entertainment, Consumer Products and Interactive.